Qatar's Labor Markets at a Crucial Crossroad

Published In: The Middle East Journal, Volume 63, Number 3, Summer 2009 , p. 421-442

Posted on RAND.org on December 31, 2008

by Claude Berrebi, Paco Martorell, Jeffery C. Tanner

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With the discovery of large quantities of natural gas, the Qatari economy has experienced sustained economic growth. Similar to what has occurred in other Gulf states, a consequence of this economic boom is that the demand level for skilled and unskilled labor far outstrips that which Qatari nationals can provide. As a result, Qatar has imported foreign labor to the point where foreigners outnumber Qataris by almost seven to one. Moreover, the structure of the labor market -- in particular, the system of generous and near-guaranteed public sector employment -- diminishes incentives for Qataris to acquire valuable skills and to work in the private sector. The reliance on foreign laborers and the lack of skilled Qatari workers is widely seen by Qatar's leaders as a serious threat to the nation's economic autonomy and long-term economic viability. Thus a key challenge facing policymakers is to devise policies and reforms that will help develop a domestic workforce with the skills and incentives to work in the economy's most important and competitive positions. Drawing on public data sources, this article provides a detailed quantitative assessment of the economic and demographic situation that underlies the current challenges and discusses several policy options that might be used to help overcome them.

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